Insurance can be a wonderful thing, but beyond that, it is a necessary addition to car ownership. Liability Insurance is there to not only protect other drivers, but also yourself. However, there may come a time in your driving history where you may have a minor accident happen under your comprehensive/collision/medical at your own fault and it will be up to you to decide if you are going to call in a claim or not.

Your first reaction will of course be to call in. This is what you have been paying all of those premiums for. The chance to have the ability to repair your damage with little to no funds out of your own pocket. Now this is all fine and dandy, but what you have to keep in mind is that sometimes the insurance penalty for an admitted accident may be much worse than the damages themselves.

For example, let’s say you were paying $90 ($1,080 a year) every six months and you turn in a claim for $1,500 of damage for accidentally falling into a construction field on a dark night. Your monthly payment could easily go up to as much as $200 for a reported accident that was by default, your fault. Calculate three years of this punishment and you get ($2400 a year) for three years, which is almost $4,000 over what you would have paid hadn’t you of reported the incident to your insurance agent.

Now as of recently, some insurance programs have taken on a forgiveness program that may protect you from increased rates, but that will only help as long as you stay with that particular program. In other words, you will not be free to shop around as the accident on your record will haunt you for no less than three years by law. You say you won’t report the accident to the police, well, that is okay, because the insurance company will do it for you!

Of course in many cases the cost of such incidents would make up for your increased rates, but it sometimes pays to think carefully before you make any sudden moves. You could end up saving yourself bushels of hard earned cash!